India Inc revenue likely to grow 5-6% in Q1: Crisil

MUMBAI: Indian companies may post only a modest growth of five to six per cent ( year-on-year or y-o-y) for the quarter ended June'13 due to pressure on volumes, according to study by ratings firm Crisil. Crisil sample however excludes excludes banks and oil and gas companies.

"While this is only a marginal improvement, at least the sharp drop witnessed over the last five quarters is expected to be curtailed." Said a report released by the ratings firm. The EBITDA - earnings before interest, taxes, depreciation, and amortisation- margins, which have also bottomed out, are estimated to remain stable at 18.5 per cent (y-o-y) in Q1 FY14.

" While volume growth will continue to remain under pressure, sectors like automobiles and FMCG are expected to benefit from a favourable change in product mix." He said

On the other hand, rupee depreciation will lend some support to export-oriented sectors. Even as the investment cycle will be weak, capital goods, construction, steel and cement are not expected to witness a further downside with the anticipated increase in GDP growth.

Revenue growth will be muted at 5-6 per cent in Q1 FY14, with half of the 28 key sectors (excluding banks, oil and gas companies) including steel, coal, fertilisers, shipping, airlines, hotels and sugar, estimated to either witness a low single-digit growth or decline in revenues on a y-o-y basis, due to pressure on volumes.

However, for FY14 the revenue growth is expected to be much higher at 10-11per cent, driven by consumption led recovery in the economy, on the back of a normal monsoon and pre-election spending by the government.